Hard-fork In Cryptocurrency, Its Types And Causes

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Hello great minds,

It is another beautiful day and I feel happy to come before you all today to discuss on an issue of great importance in the cryptospace.

I trust you are doing perfectly fine and are enjoying your activities in the community.

In our last discussion, we learnt about the dis-advantages of softfork in the cryptospace, and today, we shall be learning about cryptocurrency hardfork, please stay tuned.

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CRYPTOCURRENCY HARDFORK

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Cryptocurrency hardfork can be explained to be an irreversible and significant divergence in the blockchain, that leads to the creation of two incompatible and separate chains.

Hardfork in cryptocurrency is usually achieved when a decision is made by the community to make significant changes to the protocol, which is usually as a result of disagreement over governance, consensus rules or Scalability of the chain.

Hardfork is usually done to implement a protocol upgrade that are backward incompatible.

This implies that nodes that validate transactions in the older version of the chain will be unable to do so in this new chain.

And as a result of this, there is a split of the blockchain into two different paths, each obeying it's own set of guidelines.

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CATEGORIES OF HARDFORK

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In the crypto ecosystem, there are two categories of hardfork and they are

• Planned Hardfork

• Contentious Hardfork

• PLANNED HARDFORK

A planned hardfork can be explained to be a scheduled and deliberate modifications and upgrade to the protocol of a blockchain based digital currency.

This process has to do with a decision making that affects significant aspect of the software governing the blockchain, often with the aim of enhancing it's security, scalability and functionality.

The term "hardfork" makes us to understand that the introduced changes are not backward compatibility, and this means that nodes from the previous protocol cannot participate in the activities of the current chain.

A hardfork is usually initiated so as to resolve contentious issues or implement significant improvement within the cryptocurrency community.

It can also be initiated as a response to unique cryptocurrency technological advancement that can significantly improve the overall performance of the network.

Here, before a hardfork takes place, there is usually a release of the updated version of the blockchain software by the blockchain developers, and this often contained the proposed changes.

A detailed documentation is also released alongside this software release, and it's content includes how nodes and participants can upgrade to the latest version of the software, else they will be left behind.

• CONTENTIOUS HARDFORK

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A contentious hardfork can be explained to be a situation whereby the developers and community of a blockchain cannot come to a consensus on the changes proposed to the protocol.

This differences often result to a division in the network and this leads to the creation of two different and incompatible chains.

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CAUSES OF CONTENTIOUS HARDFORK

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In the blockchain, there are different factors that often leads to contention and some of them are

• GOVERNANCE ISSUES:

One significant cause of contentious hardfork is often as a result of ineffective governance within the cryptocurrency community.

Decision making about changes in protocol often concerns stakeholders, miners, developers, and users.

Thus, when a consensus cannot be met, and there is not protocol to meet one, then there bound to be escalation of disagreement.

• TECHNICAL DISAGREEMENT:

Another factor that can lead to a contentious hardfork is differences in opinion on technical direction of the blockchain.

These disagreement may involve security measures, scalability issues or adjustment to the underlying technology.

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CONCLUSION

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A cryptocurrency hardfork is a very important context in the blockchain.

It is splitted into two types and in these types, old nodes cannot participate in the validation of blocks in the new version unless they upgrade their system also.

As we proceed, we shall learn more about cryptocurrency hardfork.